Axeon N. V case - PowerPoint PPT Presentation

Axeon N. V case. Seminar Group B3. Charlotte Cottet Stijn Op de Beeck Sook Ching Voo Sandra Valdivia. 1. What do you feel about the initial analysis? Was there in your opinion anything wrong with it?. IRR is good

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8% should not be rate of return on the NPV!! That is the Interest rate, but even with 14 % as their internal cost of capital the project is still profitable.

Axeon will benefit from a deeper analysis where the most knowledgeable people in the company take part (in this case people from operations, already producing the material since all the miscalculations are in this area)

It is very risky to invest so much money in a new factory when the sales are based on forecast. They could test the market with production from The Netherlands and adapt afterwards.

By doing so they can start training UK employees on this new process, and when the time is right (according to cost of in house vs. cost of shipping at certain level of volume) open a factory in the UK with already skilled employees.

All the issues in this case, facing by Axeon are related to their control systems. They just rely on results control but lack of any personnel and cultural control aligned within the 4 companies.

This fact reflects in the policies of Axeon. In this specific case the problem comes from the transfer price policy.

They need to work on creating a organizational culture. They could start implementing some cultural controls like intraorganizational transfers and giving an example of unity from the top managements (tone at the top).